Stakeholders' Scorecard

Corporate social responsibility is not just a catch-phrase. We take our role seriously and are committed to improving on our efforts.

The Stakeholders' Scorecard discloses our performance for the year ended September 30, 2003, against global key performance indicators covering customers, employees, communities and the environment. Unless otherwise stated, the data includes our operations in Australia, the United Kingdom, Ireland and New Zealand.

In 2004, our aspiration is to complete an externally verified, full triple bottom line report, consistent with the Global Reporting Initiative Finance Sector Supplement.

Balanced stakeholder management: This year the National's Board approved a global decision-making framework that is designed to embed balanced stakeholder management as an integral part of managing every day business. A global Corporate Social Responsibility Council, in conjunction with Regional Councils and community forums, is being established to ensure alignment on important corporate social responsibility issues in all of our businesses, regardless of their location. Balancing decision-making and building trust with all stakeholders, including monitoring our progress towards achieving our goals, is essential. The Board will discuss progress quarterly and receive formal benchmark reports twice a year.

Corporate governance: We are committed to greater transparency in our decision-making processes. We have made available information on our corporate governance procedures and practices in the Corporate Governance section of the Concise Financial Report 2003. Information is also available in the Corporate Governance section of the Group's website.

The table below discloses internal and external audits of our business practice and financial performance conducted globally.

Internal & External Audits in 2003

Political donations: The Group's policy and practice of not making donations to any political party in any of our countries of operation was adhered to throughout the year.

Our customers
We are committed to offering a wide range of financially inclusive products and services tailored for the communities in which we operate globally.

The Group has developed several low or no transaction fee products to assist those customers that rely on government benefits or are considered financially vulnerable.

In Scotland, we support Social Investment Scotland, a Community Development Finance Initiative which provides finance to develop and sustain social entrepreneur programs in the charitable sector that would not normally meet lending approval criteria.

In Australia, the National has 21,784 concession card accounts for people receiving government benefits. We also have 28,901 community accounts for not-for-profit organisations.

This year in Australia the National sponsored a not-for-profit conference. One of the key financial inclusion issues identified was the need to re-integrate people into the financial mainstream. In 2004, the National, in partnership with Good Shepherd, will set up a new scheme in which a low interest loan between $2,000 and $5,000 will become available to qualifying customers.

The National continues to support a Bankcard credit card in Australia that is fee-free with a lower interest rate and relatively low credit limits.

Wealth Management offers several socially responsible investment products through its investment portfolios. The value of investments in these funds throughout Australia and New Zealand is $151 million.

Transparency on fees and charges: The Group discloses its fees and charges in relation to transaction accounts through publications that are available in all branches and on our websites.

Wealth Management discloses trailing commissions as required by law. MLC passes shelf space fee rebates from fund managers on to its customers in a move to further clarify fees for consumers. Fees are also disclosed in product documents and when advice is given. Our financial planners are required to disclose to customers other commissions when giving advice.

Accessibility of services: We have an extensive network of outlets, ATMs, Internet banking, telephone banking and other customer services in Australia, New Zealand, the United Kingdom and Ireland. In Australia, we have 790 branches or agencies and 435 other outlets. Our global network is disclosed in detail on page 3.

In Australia, we are taking steps to improve access to banking services for customers with disabilities, assisting them to achieve financial independence. Following a pilot of audio-enabled ATMs with the Royal Victorian Institute for the Blind, we now have over 60 ATMs for the visually impaired. We plan to add to our network of audio-enabled ATMs next year.

Our extensive regional and remote network is part of our commitment to remote communities. Clydesdale Bank operates three mobile bank vans on Mull, Skye and Shetland Islands. The vans tour these communities to provide deposit and withdrawal services to customers.

In Australia, we also offer banking via 3,010 Australia Post outlets; 43% of these are in rural and regional locations.

The National's commitment to rural Australia goes beyond access to banking facilities. Early in 2003, the National hosted a televised expert panel discussion, viewed by over 1,600 farming customers, on expected weather patterns.

Our community
Stakeholder engagement: In 2003, we engaged our stakeholders through a wide variety of open forums that helped us understand the social and environmental impacts of our business.

We became an Organisational Stakeholder of the United Nations' sponsored Global Reporting Initiative and are committed to contributing to the international debate on triple bottom line reporting standards through this forum. Visit www.globalreporting.org for further information.

In the United Kingdom, we developed networks with a wide range of external forums that tackle issues of community concern. These forums enabled our senior managers to discuss matters covering financial awareness, youth development, numeracy and social inclusion with community leaders.

A number of senior managers have active roles in community forums. The Chief Operating Officer of National Irish Bank participates in the Board of Business in the Community Ireland; the Chief Operating Officer of Yorkshire Bank is on the leadership teams of both the Business in the Community and Leeds Cares community programs; and the Chief Operating Officer of Clydesdale Bank is on the Board of Scotland Against Drugs.

The National's Community Consultation Forum in Australia was established in 2000. The forum members include senior representatives from major community organisations. The Reverend Tim Costello chairs this forum. The Community Forum's input has assisted the National in a number of key outcomes, including the establishment of the National's concession card account for customers who receive a government benefit. The National is keen to engage the Community Forum on a wider range of issues in the future, including the building of social capital, financial literacy and environmental matters.

Building social capital: This year, the Group donated $17.5 million through a range of activities and partnerships that promote skills for life and foster bio-diversity (as shown below).

Through the Yorkshire Region Business In the Community, Yorkshire Bank supports the literacy program for children, Right to Read, and a numeracy program, Numbers Partners.

Northern Bank, in conjunction with Business in the Community, developed the numeracy program, Time 2 Count.

Clydesdale Bank provides administration support and head office accommodation to Scotland Against Drugs.

In Australia, through the National Australian Football League (AFL) Pathway program, we provide recognition, resources and support to local football communities while sponsoring the development of young Australians seeking to reach their ultimate goal of playing AFL football.

Wealth Management's People and Community Trust is a global team, sponsoring programs and initiatives that focus on interaction with communities and personal growth.

The Mt Wellington Festival in Hobart, Tasmania. The Festival Committee was a state winner for "Art and Culture" in the 2002 National Volunteer Awards.

Standards of ethical behaviour are reflected in our codes of conduct and our values, which represent the very heart of our organisation. The Code of Banking Practice in Australia is located on our Australian website, www.national.com.au

Developing and sustaining a high performance culture is critical to achieving our strategic agenda globally.

As an equal opportunity employer, we are developing practices to ensure that diversity includes the issues of gender, disability and indigenous employment. Specific activities have been undertaken in the areas of flexible work patterns for work/life balance, and recruitment policies including targeted employment programs for both indigenous and disabled employees. Details of our Australian Disability and Discrimination Action Plan can be found at www.national.com.au

The stewardship of diversity is managed by the senior leadership team. In Australia, this activity is headed by a Diversity Guiding Coalition that develops strategies and tracks and monitors outcomes.

Diversity Profile Age & Gender^#

#year ended July 1, 2003

Gender by Hierarchy^#

#year ended July 1, 2003

We reward our people based on market remuneration regardless of gender. Details of senior executive remuneration are disclosed on pages 36-37 of the Concise Financial Report 2003.

 Workforce Profile^#

#year ended July 1, 2003

In Ireland, we participate fully with the Fair Employment programs monitoring both gender balance and religious diversity.

Our indigenous employment program in Australia this year focused on creating vocational pathways to permanent employment. The senior leadership team has also approved funding of an integrated suite of scholarships for indigenous students in partnership with the University of Melbourne's scholarship program and the Melbourne Business School, spanning secondary and TAFE sectors as well as undergraduate and post-graduate education.

We have also entered into agreements with the relevant financial service unions in Australia, the United Kingdom, Ireland and New Zealand. These agreements recognise a wide range of employee entitlements, including rates of pay and conditions, training and parental leave.

Former Kangaroos player and Bali victim, Jason McCartney, and Dr Anna Lavelle from the Australian Red Cross Blood Service at the 2003 launch of the National Blood Donor Recognition Week.

We are committed to a high performance culture and we value the intellectual capital embedded in our workforce.

This commitment includes assisting tertiary students to make the transition into the workforce. We employed over 145 graduates in Australia, the United Kingdom, Ireland and New Zealand this year.

Our workforce demographics are shown below. Our global employee turnover was 9.8% for the year ended July 1, 2003.

Employee satisfaction: Satisfaction has increased by 11.5% since the Employee Opinion Survey was last conducted in October 2000. Strategies are being put in place to address areas of low engagement.

Employee Satisfaction^#

#year ended July 1, 2003

Environment
In December 2002, the National signed an agreement to become a member of the United Nations Environment Program Statement for Financial Institutions. This membership recognises the importance of working with other global financial institutions in managing environmental risk in their operations, lending and investment decisions. Our environmental policy statement that details our commitment can be found at www.nabgroup.com

We specifically consider environmental risk when assessing lending risk - including project finance and institutional lending. Our global lending profile on an industry basis is set out on page 46 of the annual financial report 2003.

This year, the Group has begun the journey to implement, globally, a single environmental management system that is consistent with ISO14001. Implementation will align operational processes and data from the United Kingdom, Ireland, Australia and New Zealand while respecting regional standards and legislative differences. Copies of the Australian Greenhouse Challenge Report for 2001/2002 can be found at www.greenhouse.gov.au

Environmental champions: In 2002, the Environment Council of Senior Managers and 250 Environment Champions formed a coalition for developing further environmental efficiency programs throughout Australia in regard to office management.

Northern Bank has purchased green energy for the majority of its branch network. This energy is 100% generated by wind turbines. This year, Northern Bank consumed 2,600,000 kWh, which is a reduction of 1,118 tonnes of CO₂.

Kiwi Trust: In November 2002, Bank of New Zealand relaunched the bio-diversity program, Kiwi Recovery, under the new banner of The Bank of New Zealand Kiwi Recovery Trust. The Kiwi Trust is responsible for increasing awareness of the plight of the kiwi through education, coordinating fundraising and sponsorship nationally, as well as continuing to invest in research, predator control, population growth, surveys and monitoring.

We welcome your feedback on our Stakeholders' Scorecard.   Contact us via email: corporate_social_responsibility@national.com.au   Or send a letter to: The Corporate Social Responsibility Team Group Corporate Affairs National Australia Bank Limited 500 Bourke Street, Melbourne Vic 3000, Australia